- PM Shehbaz takes people into confidence over “tough decisions” taken by coalition govt.
- “Our motive is to provide relief to the masses and to reduce burden of inflation,” he says.
- PTI leader criticise govt for imposing 10% super on 13 sectors.
ISLAMABAD: Prime Minister Shehbaz Sharif announced Friday that the coalition government plans to impose a 10% super tax on large-scale industries, and that “tough decisions” have been taken to protect the economy on budget 2022-23.
Addressing the nation, after a meeting with his economic team, the premier said that the coalition government has taken some “tough decisions” regarding the federal budget for the next fiscal year 2022-23. “I want to brief the people about those decisions and the actual [economic] situation of the country,” he said, highlighting the two major reasons behind these decisions.
“Our first motive is to provide relief to the masses and to reduce the burden of inflation on the people and facilitate them,” he elaborated.
“Our second motive is to protect the country from going bankrupt,” he said, adding that it has been devastated due to the “incompetency and corruption” of the previous Imran Khan-led government.
The decisions taken now will save the country from bankruptcy, he vowed.
Meanwhile, PM Shehbaz further added that other motives included stabilisation of the economy and prosperity of the county. “These aren’t just words, this is the voice of my heart and InshaAllah we will be able to achieve all these targets,” he maintained.
IMF programme to fianlise soon
Regarding the International Monetary Fund (IMF) programme, he said: “If the IMF doesn’t put forward any other conditions, I am hopeful that we will be able to reach a staff-level agreement with them soon.”
He further added that the coalition government has taken some “daring” decisions after mutual consultations to provide relief to the people; however, the premier admitted the nation will witness difficulties in the short-run.
“We will steer out of the economic crisis because of these decisions and step onto the path envisioned by Quaid-e-Azam,” he said, adding that after coming into power, the coalition government had two options; to call elections afresh or to protect the “devastating economy” of the country by taking some tough decisions.
“The first way out was easy; however, our [coalition government] conscience did not allow us to do something which would impact the country as the time was to protect the state and not politics,” he stated.
The prime minister urged the affluent sections of society to come forward and share the burden.
He said that this is the first budget in the history of Pakistan in which the government has provided an “economic vision”.
Details of ‘tough decisions’
Announcing the imposition of a 10% super tax on cement, steel, sugar, oil and gas, fertiliser, banking, textile, chemical, beverage, and automobile industries, he said it has been done to save the common man from taxes.
“A 1% tax has been imposed on people earning over Rs150 million, 2% on those earning over Rs200 million, 3% on those earning over Rs250 million and 4% on those earning over Rs300 million,” he announced.
Here’s a list of 13 sectors on which 10% super tax will be imposed:
- Automobile assembling
- Sugar mills
- Oil and gas
- LNG terminals
Industry facing crippling costs: Hammad Azhar
Reacting to the PM Shehbaz’s address, former energy minister Hammad Azhar said that the “super tax will be priced in their balance sheets and passed on to consumers” in many ways.
He said that while the country’s industry is already hit by price hikes, the public will now be more affected faction.
“Industry is already facing crippling costs due to rising prices of commodities and energy. This super tax will be priced in their balance sheets and passed on to the customers in many cases. Means even higher prices for the public,” Azhar wrote.
“Super tax will end up further squeezing the formal sector of the economy. This means taxing the already taxed even more. The economy is nosediving and such a measure at this time will reverse the industrialisation momentum that PTI generated,” he added.
Imran Khan increased tax collection: Shahbaz Gill
Meanwhile, PTI leader Shahbaz Gill criticised the incumbent coalition government for its decision to impose a 10% super tax on industries, listing down some of its consequences: rising unemployment, the decline in growth, 10% further increase in prices and an intensifying inflation storm.
He said that former prime minister Imran Khan increased the record of tax collection instead of taking such “cruel measures”.
Pakistani authorities have ‘delivered’ on economic front, says top IMF official
- IMF official says Pakistan ‘important’ country in the world.
- “Our country is destined to succeed,” says Masood Khan.
- Nathan Porter hails actions and policies of Pakistani govt.
WASHINGTON: Bahador Bijani, an Executive Director of the International Monetary Fund (IMF), has noted an overall improvement in the economic situation, saying, the “Pakistani authorities have delivered”.
He made these remarks at an event hosted by Pakistan’s ambassador to the US in honour of friends of Pakistan from International Financial Institutions including IMF, International Finance Corporation (IFC), World Bank (WB), and Multilateral Investment Guarantee Agency (MIGA), at Pakistan House in Washington.
“I think the future for Pakistan is very bright. Pakistan is not just any country. It’s one of the most important countries in the region and in the world. Pakistanis deserve much more,” the IMF executive director was quoted as saying in an official statement.
The meeting took place as Islamabad awaits the IMF board’s meeting to approve a staff-level agreement on the first review of a $3 billion bailout, which will unlock $700 million in funding for the country.
Addressing the event, Ambassador Masood Khan observed that the past year was difficult for Pakistan. “We have passed through a wrenching transition and we are moving toward a new phase of stability,” he added.
“Have faith in Pakistan. Our country is destined to succeed,” he said.
“Our confidence stems from the people of Pakistan. We have a growing middle class and our human capital is increasing at a very fast pace,” he added.
Addressing a gathering of over 40 guests from the IFIs, the ambassador said that we were grateful to IFIs for their steadfast support in navigating through a difficult economic period.
Nathan Porter, IMF Mission Chief to Pakistan, speaking on the occasion, expressed satisfaction over the recently concluded staff-level agreement. He said that the actions and policies of the current government reflected its commitment to steer the country towards stabilisation.
“With that base, hopefully, we can build on and be able to move forward to reforms to build a stronger, prosperous and inclusive Pakistan,” he said.
He also appreciated the cooperation and the policies pursued by the State Bank of Pakistan for ensuring fiscal stability in the country.
Athanasios Arvanitis, Deputy Director Middle East and Central Asia Department IMF, also spoke on the occasion and expressed the hope that the elections in Pakistan would usher into a new beginning of undertaking a reform process that the country needed to make progress and address some of its structural issues.
Thanking them for their strong support, Ambassador Khan observed that the digitisation of Pakistan’s economy was creating new opportunities in the country for its youth and professionals taking the lead role in steering the country towards a bright future.
Lauding the professional achievements of Pakistanis working in the IFIs, the ambassador observed that Pakistani professionals have proved their mettle and have made the entire nation proud of their accomplishments.
“We are a nation of talented people. If you can make it, Pakistan will also make it,” observed the ambassador.
Syed Ali Abbas, Advisor Mission Chief UK, European Department IMF, in his remarks, expressed the hope that with the successful completion of the electoral process in Pakistan, the country would move towards a long-term and more durable approach which would change the trajectory of Pakistan.
Aftab Qureshi from the World Bank and Sidra Rehman from the IMF also spoke on the occasion and assured their continued cooperation.
The ambassador thanked the members of the IFIs and said that the country looked forward to working with its development partners.
SNGPL demands 137% increase in gas tariff
- SNGPL’s prescribed gas prices amount to Rs1,715.49 per MMBTu.
- Company seeks revision of rate to Rs2,961.98/MMBTu.
- SNGPL calculates cost of RLNG’s service at Rs72.16bn.
ISLAMABAD: To address the looming revenue shortfall, the Sui Northern Gas Pipeline Limited (SNGPL) is yet again demanding a significant 137% increase in the average prescribed gas prices, amounting to Rs1,715.49 per MMBTu.
The state-owned company, responsible for supplying gas to Punjab and Khyber Pakhtunkhwa, has submitted a formal request to the Oil and Gas Regulatory Authority (Ogra) for the fiscal year 2023-24, seeking a revision of the rate to Rs2,961.98/MMBTu, effective from July 1 of the current financial year.
The company’s petition to Ogra outlines an estimated revenue requirement for FY24 at Rs179.16 billion, including Rs697 million allocated for LPG air-mix projects in Gilgit for the ongoing fiscal year.
On this basis, SNGPL is seeking a hike in the average prescribed gas price by Rs506.35/MMBTu, effective from July 1, 2023. It has notably incorporated the cost of re-gasified liquefied natural gas (RLNG) diverted to domestic consumers into the overall cost of gas, in alignment with a decision by the federal cabinet on October 10, 2023.
Additionally, the utility has factored in Rs427.83 billion to offset shortfalls from previous years. To justify a 137.6% increase in average prescribed prices to Rs2,961.98/MMBTu from July 1, 2023, SNGPL cites the rise in the cost of gas/RLNG and other components outlined in its petition.
Furthermore, SNGPL has calculated the cost of RLNG’s service at Rs72.16 billion (equivalent to Rs293.07/MMBTu) for the current fiscal year. The company indicates that the subject petition is undergoing revisions based on actual cost data and sales figures for July and August 2023, resulting in a reduction of the indigenous gas business shortfall from Rs181.516 billion to Rs179.160 billion.
The revised segment-wise shortfall and RLNG business cost for FY2023-24 are detailed as Rs179.160 billion for indigenous gas business and Rs427.830 billion for shortfalls from previous years. The total indigenous gas business shortfall, inclusive of previous years’ shortfalls, amounts to Rs606.990 billion, with an additional Rs72.160 billion designated as the RLNG cost of supply, as stated in the petition.
Ogra has invited comments from all interested and affected parties, including gas consumers and the general public. A public hearing on the petition is scheduled for December 11, 2023, in Lahore, where the regulatory authority will determine the gas prices.
PSX sets new record as KSE-100 crosses 63,000 mark
KARACHI: Bulls on Monday gripped the Pakistan Stock Exchange (PSX) as the benchmark index achieved a new milestone by crossing the 63,000 mark for the first time.
According to the PSX website, the benchmark KSE-100 index gained 447.13 points or 0.71% to reach 63,403.15 points during the intraday trading at 10:59am.
Pakistan-Kuwait Head of Research, Samiullah Tariq, told Geo.tv that major catalysts for the recent bull run in the equity market include strong profitability, attractive valuation, and expectations of a reduction in interest rate — scheduled to be announced on December 12.
He added that the “market should remain bullish in the coming days”.
A day earlier, stocks were boosted by expectations of improved economic conditions following signs of progress in securing financial support from the International Monetary Fund (IMF) and friendly countries.
Benchmark KSE-100 index rose 0.74% or 463 points to close at 62,956 points.
Investors were confident about the outlook for the economy, which has shown some improvement in key indicators such as trade deficit, remittances and exports. The local currency also remained stable and gained for the sixth consecutive session.
“There is a positive sentiment in the market, driven by optimistic expectations of an improved economic landscape,” said analyst Naveed Nadeem at Topline Securities.
“This positive outlook is supported by anticipated financial inflows from the IMF and friendly countries. Additionally, there is speculation about a potential reduction in interest rates in the upcoming monetary policy committee meeting, further enhancing the positive environment.”
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